Ford (F) at Weakest Point in Years Going into UAW Talks (GM) (TM) (HMC)
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Ford Motor (NYSE: F) shares are outperforming the broader stock market Friday morning ahead of talks with the United Auto Workers next week.
These talks, however, may be tougher for Ford than in the past.
According to reports earlier, Ford is in a vulnerable position after eschewing bailout money from the U.S. Two reasons cited by Bloomberg include no binding arbitration and no ban on strikes.
General Motors (NYSE: GM) and Chrysler LLC don't share the same problem. When those two companies took U.S. funds in 2009, workers had to agree not to strike over wages and benefits during contract talks, and to take unsettled disputes from "the bargaining table to arbitration."
Ford rejected the strike ban and arbitration.
Generally, the UAW uses one automaker to craft a template it can use in other negotiations. However, with Ford profiting $9.3 billion over the last two-years, Ford might be a bigger target than GM or Chrysler.
UAW president Bob King wants to avoid arbitration, but says "workers must be rewarded for the $7,000 to $30,000 in concessions they each gave since 2005 to help the U.S. automakers survive."
What's more, Ford CEO Alan Mulally was awarded $56.6 million in stock bonuses and a 48 percent increase in his salary to $26.5 million in 2010, something that will be a sticking point with the UAW into talks.
But Ford is looking to close the wage gap. It's argument is that it pays $58 per hour on average in wages and benefits for UAW members. The number is $8 per hour higher than those at non-union plants from rivals such as Volkswagen, Toyota (NYSE: TM), and Honda (NYSE: HMC). GM's hourly rate is slightly lower at $56 on average. Arbitrator's may take the wage gap into consideration in negotiations.
But if contract talks stall, it's more likely an extension will be implemented before going to arbitration.
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These talks, however, may be tougher for Ford than in the past.
According to reports earlier, Ford is in a vulnerable position after eschewing bailout money from the U.S. Two reasons cited by Bloomberg include no binding arbitration and no ban on strikes.
General Motors (NYSE: GM) and Chrysler LLC don't share the same problem. When those two companies took U.S. funds in 2009, workers had to agree not to strike over wages and benefits during contract talks, and to take unsettled disputes from "the bargaining table to arbitration."
Ford rejected the strike ban and arbitration.
Generally, the UAW uses one automaker to craft a template it can use in other negotiations. However, with Ford profiting $9.3 billion over the last two-years, Ford might be a bigger target than GM or Chrysler.
UAW president Bob King wants to avoid arbitration, but says "workers must be rewarded for the $7,000 to $30,000 in concessions they each gave since 2005 to help the U.S. automakers survive."
What's more, Ford CEO Alan Mulally was awarded $56.6 million in stock bonuses and a 48 percent increase in his salary to $26.5 million in 2010, something that will be a sticking point with the UAW into talks.
But Ford is looking to close the wage gap. It's argument is that it pays $58 per hour on average in wages and benefits for UAW members. The number is $8 per hour higher than those at non-union plants from rivals such as Volkswagen, Toyota (NYSE: TM), and Honda (NYSE: HMC). GM's hourly rate is slightly lower at $56 on average. Arbitrator's may take the wage gap into consideration in negotiations.
But if contract talks stall, it's more likely an extension will be implemented before going to arbitration.
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UAW contract talks
Gary on Jul 22, 2011 11:56 AMMark as Spam | Reply to this comment
The UAW leadership still doesnt get it. Non union auto plans still cost less. Ford still not only has debt it still has to maintain costs to be competitive. The remarks about Mulally are way off base because the amount he made compared to the failure of Ford if he wasnt brought in is a drop in the bucket. Ford would have been right with GM and Chrysler in bankruptcy court. The UAW needs to realize that the days of high pay for blue collar workers in a world economy and global auto market are over. Just because Ford is starting to make some money is not a reason to raid their earnings and reverse the progress they have made. If the UAW does not back off on this one it will end up meaning more lost jobs to auto plants in Mexico and elsewhere.